So… you may have heard that Bally Sports is now, officially broke. A few weeks back, they stopped payments owed to creditors. It’s almost certain, now, that they will declare bankruptcy. What does this all mean?
Short version: to we Twins fans, not a lot. The Twins will have games on TV, just like always.
Medium version: exactly how they will have those games is up in the air. It could be on MLB’s streaming service.
I am no expert. But from a few sources, here’s what I understand to be happening. (Some good explanations I’ve read so far are from Bleed Cubbie Blue and Twin Cities Business.)
OK… so, what’s going on here?
When Disney bought Fox’s entertainment division, the US government, in a rare moment of caring about corporate consolidation, said Disney couldn’t have the Fox regional sports networks (RSNs). So Disney sold them to (very evil) Sinclair Broadcasting. Sinclair then put the Fox Sports RSNs into a subsidiary (Diamond Sports Group), got some naming rights from casino company Bally*, and away they went.
And Sinclair got hosed on this. It turned out the purchase price of Fox Sports RSNs wasn’t worth nearly what Sinclair paid.
For years, TV companies were paying a ton to broadcast live games, since those are one thing viewers have to watch commercials on. But, in recent years, with the growing popularity of cable cutting and other entertainment options, revenue for many regional broadcasters hasn’t been worth the rights fees... even though baseball’s (local) ratings are fine.
*(And it doesn’t help that MLB is increasingly less interested in expanding their loyal fanbases, but more interested in the money they can get from online gambling.)
While Sinclair is plenty rich, Diamond Sports is broke. Sinclair doesn’t have to pay their financial obligations. And those obligations include the TV contracts they have with sports teams -- about half of MLB, also some NBA and NHL; other teams have contracts with RSNs that aren’t broke. Yet.
(That’s the paragraph I'm most confused on, as I'm not exactly sure how the Bally/Diamond/Sinclair financial situation is set up. SORRY FOLKS)
MLB is working on finding new broadcast partners for those 14 teams. They’ve also seriously discussed streaming those games themselves. Which would mean ending the dreaded “regional blackouts.”
Now the long version. How do TV rights work?
For the NFL, all TV rights are put in a big pile and split 32 ways. For MLB and the other sports, only national broadcast rights are split equally (Fox/TNT for the playoffs, etc.) All local broadcast rights are negotiated by local sports teams.
The Twins, say, negotiate a deal with a RSN like Bally Sports North. Bally Sports North then negotiates deals with various TV providers, like Comcast, or whatever. (That’s why Twins games have come/gone from satellite dishes, PlayStation Vue, Hulu, etc. – when those deals were up, Fox/Bally asked more than those companies wanted to pay.)
What happens now?
Bally/Diamond enters into “bankruptcy negotiations” with everyone it owes money to. They'll try to get somebody to buy up the company, and all its debts, presumably at a bargain rate. Scripps Media has shown some interest, and owns almost as many local broadcast stations as Sinclair. (Scripps once bought the teeny cable channel Retirement Living TV, so they’re familiar with baseball’s age demographic.)
If nobody bites, Bally then will ask sports teams to accept lesser payments. Some might. Most won’t. THIS is where things get complicated. (MORE complicated.)
At this point, the teams have several options. They could try each finding new RSNs (getting ones that cover other teams to expand their territory). It’s a guarantee those RSNs won’t pay teams what Bally was paying. And, those RSNs would have to negotiate new deals with Comcast, etc.
Or, MLB could just do the streaming thing. That wouldn’t please cable customers who partially pay for cable to see the Twins. They'd have to pay again, to MLB, to watch games.
Another tricky thing there is because MLB.tv is owned by the league, not by the teams, how does MLB divvy up how much teams are paid? As the indispensable Neil deMause reminds us, the Angels/Rangers get a lot more from local TV deals than smaller-market teams do. Would MLB then start actually sharing broadcast money more equally? What about the teams on non-Bally RSNs? What about the Yankees, who own their own cable channel?
(I’d be remiss if I didn’t mention the Twins’ brief attempt at creating their own sports network, Victory Sports One, back in 2004 or so. The Twins did a whole promotion of this at TwinsFest that year. Comcast, etc., took one look at what the Twins wanted and said “No.” The Twins stuck with Fox Sports North.)
So… what’s the one thing we can be sure of?
Twins games will be on TV, either through a new Bally deal, a new RSN, or through MLB.tv. And baseball (and other local sports teams) will be getting less money than they used to, although, don’t worry… the teams themselves are all making tons of money.
And it’s almost a sure bet that wherever Twins games end up, they’ll still have Dick, Marney, Justin and the gang. But I’ll probably keep sticking to radio. It’s easier to multitask that way… and to make fun of Dan Gladden.